Friday, March 29, 2024

Finer wool fills wallets

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Linking end markets back to the farmgate is the optimum way to get the best value out of wool, PGG Wrightson wool general manager Grant Edwards says.
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And with opportunities in the global market New Zealand needs to get in on them now, he told farmers at a recent Beef + Lamb field day at Arrowsmith Station.

The Ashburton high country station has just contracted its fine Merino wool for a third year to Californian-based Patagonia in an exclusive deal Edwards hopes, given time, will grow wider across NZ.

Patagonia specialises in active outdoor sportswear.

The company is very particular about the value chain, driven by several key wool standards including animal welfare, farm management, knowing the supply chain and that the environment is being treated right.

“That’s the way of today,” station owner Philip Wareing said.

“If we want to get the best for our product we have to be more and more compliant.

“The Patagonia standard, while it has some funny little things like the sheep having water at all times in transportation, at the end of the day we are getting a very good premium on our wool.”

Wareing said a change in sheep breeding and management has made a huge difference to the station’s wool clip over the past four years.

He credited the wool turnaround on the expertise and passion for sheep of the station’s more recent farm manager Brian May.

“He’s very keen on genetics and he’s worked hard to get the mix right as we work towards an all-poll Merino flock.”

When May started at Arrowsmith in 2015 the four-tooth ewes were clipping four kilograms at 30 microns.

Four years on they are clipping 5.5kg at 18.5 microns, earning the station a $2.50-$3.50/kg premium on Australian Merino wool prices and supplying one of the world’s most exclusive markets.

“We don’t want to go any finer. We’re just concentrating on weight now,” Wareing said.

Edwards said there’s a challenge in that for NZ.

“There’s very strong demand around the world for 18.5 micron. 

“Australia has gone through the drought and production is back 12-15% this year with a further 10% fall in production next year.

“Aussie is producing 1.8 million bales of this wool. NZ is producing 60-70,000 bales.

“NZ could grow a lot more,” Edwards said.

“And what we want to do a lot more is link more end markets back to the farm gate.

“Finding manufacturers overseas and linking back to the grassroots on the farm is where the true value of wool will be found, not just in fine wools, though it’s easier to do with fine wools, but also with crossbred wool. 

“Through forward contracts we are able to offer wool growers price certainty and securing wool long-term adds certainty to the supply chain and manages price fluctuations.”

Fixed contracts lessen the reliance on spot price on the day the wool is ready for sale and global partners are provided with certainty of supply, securing their long-term commitment to NZ wool, Edwards said.

“It can be a gamble but to get the real worth out of what we are producing on our farms we are going to have to be prepared more and more in the future to produce to consumer order.

“Certainly this Patagonia contract is working very, very well for us here at Arrowsmith,” Wareing said. 

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